When Consumers Have No Choice but to Buy from One

question 211

Multiple Choice

When consumers have no choice but to buy from one firm (local utility, etc.) :

• A) they usually end up paying too much for the good or service.
• B) government regulation is usually used to protect consumers.
• C) they will always get the good or service at the lowest price available.
• D) None of these occur.

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Definitions:

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

Stock Price

The cost of purchasing a share of a company's stock, representing ownership in the company and a claim on part of its assets and profits.

Maximum Loss

The greatest amount of loss an investor or trader is potentially exposed to in an investment or trade.

Call Premium

The amount a call option buyer pays to the seller over and above the option's intrinsic value, which reflects the time value or speculative premium of the option.